Japan’s corporate culture has traditionally prioritized the interests of stakeholders such as employees and suppliers over those of shareholders. After a decades-long economic slump, Japan’s government has begun efforts to improve corporate governance and firms' incentives to engage with shareholders. Misaki Capital was founded in 2013 with a strategy of constructively engaging with portfolio firms, providing operational and financial advice to management in order to improve shareholder value. This case asks students to consider the attractiveness of Japanese equities given recent reforms and to evaluate the investment approach of Misaki Capital.

We study the effect of staggered boards on long-run firm value, using a natural experiment: a 1990 law that imposed a staggered board on all firms incorporated in Massachusetts. We find a significant and positive average increase in Tobin's Q among the Massachusetts treated firms, suggesting that staggered boards can be beneficial for early-life-cycle firms, which exhibit greater information asymmetries between insiders and investors. These results are validated using a larger sample of firms from the Investor Responsibility Research Center. In exploring possible channels for these effects, we find that the effects are stronger among innovating Massachusetts firms, particularly those facing greater Wall Street scrutiny. The evidence is consistent with staggered boards improving managers' incentives to make long-term investments.